UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1996
Commission file number 1-4416
SPS TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its Charter)
PENNSYLVANIA 23-1116110
(State of incorporation) (I.R.S. Employer
101 Greenwood Avenue, Suite 470 Identification No.)
Jenkintown, Pennsylvania 19046
(Address of principal executive offices) (Zip Code)
(215) 517-2000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X . No .
The number of shares of Registrant's Common Stock
outstanding on August 5, 1996 was 5,980,261.
<PAGE>1
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
PART 1
FINANCIAL INFORMATION
Item 1. Index to Financial Statements
Condensed Statements of Consolidated Operations -
Three and Six Months Ended June 30, 1996 and 1995
(Unaudited)
Condensed Consolidated Balance Sheets -
June 30, 1996 and December 31, 1995
(Unaudited)
Condensed Statements of Consolidated Cash Flows -
Six Months Ended June 30, 1996 and 1995
(Unaudited)
Notes to Condensed Consolidated Financial Statements
<PAGE>2
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
(Unaudited-Thousands of dollars except share data)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ---------------------
1996 1995 1996 1995
---------- ---------- ---------- ---------
Net sales $ 121,302 $ 100,581 $ 235,277 $ 203,013
Cost of goods sold 96,352 81,858 187,502 166,995
---------- ---------- ---------- ---------
Gross profit 24,950 18,723 47,775 36,018
Selling, general and
administrative expense 14,490 12,163 28,555 23,813
---------- ---------- ---------- ---------
Operating earnings 10,460 6,560 19,220 12,205
---------- ---------- ---------- ---------
Other income (expense):
Interest income 45 166 105 266
Interest expense (1,650) (1,560) (3,240) (3,180)
Equity in earnings
of affiliates 252 614 354 1,014
Minority interest (108) (108)
Other, net (389) (125) (521) (150)
---------- ---------- ---------- ---------
(1,850) (905) (3,410) (2,050)
---------- ---------- ---------- ---------
Earnings before income taxes 8,610 5,655 15,810 10,155
Provision for income taxes 2,590 1,730 4,750 3,180
---------- ---------- ---------- ---------
Net earnings $ 6,020 $ 3,925 $ 11,060 $ 6,975
========== ========== ========== =========
Earnings per common share
and common share equivalent $ .95 $ .67 $ 1.76 $ 1.20
========== ========== ========== =========
Weighted average number of
common shares used to compute
earnings per share 6,329,366 5,832,312 6,273,856 5,794,737
See accompanying notes to condensed consolidated financial statements.
<PAGE>3
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited-Thousands of dollars)
June 30, December 31,
1996 1995
------------ ------------
Assets
Current assets
Cash and cash equivalents $ 24,055 $ 8,093
Accounts and notes receivable,
less allowance for doubtful
receivables of $1,545 (1995-$1,292) 78,696 61,294
Inventories 97,626 88,090
Deferred income taxes 15,951 16,396
Prepaid expenses 2,886 3,103
Net assets held for sale 1,800 2,362
--------- ---------
Total current assets 221,014 179,338
--------- ---------
Investments in affiliates 4,445 4,516
Property, plant and equipment, net of
accumulated depreciation of $122,649
(1995-$118,120) 120,575 112,738
Other assets 35,471 25,495
--------- ---------
Total assets $ 381,505 $ 322,087
========= =========
See accompanying notes to condensed consolidated financial statements.
<PAGE>4
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited-Thousands of dollars, except share data)
June 30, December 31,
1996 1995
------------ ------------
Liabilities and shareholders' equity
Current liabilities
Notes payable and current portion of
long-term debt $ 4,649 $ 6,578
Accounts payable 31,442 28,041
Accrued expenses 44,275 39,545
Income taxes payable 3,793 3,267
--------- ---------
Total current liabilities 84,159 77,431
--------- ---------
Deferred income taxes 13,450 13,061
Long-term debt 91,134 58,119
Retirement obligations 28,305 27,827
Minority interest 4,258
Shareholders' equity
Preferred stock, par value $1 per share,
authorized 400,000 shares, issued none
Common stock, par value $1 per share,
authorized 30,000,000 shares,
issued 6,621,242 shares (6,450,909
shares in 1995) 6,621 6,451
Additional paid-in capital 80,887 74,685
Retained earnings 89,651 78,591
Minimum pension liability (2,626) (2,626)
Common stock in treasury, at cost,
658,181 shares (599,258 shares in 1995) (7,980) (4,846)
Cumulative translation adjustments (6,354) (6,606)
--------- ---------
Total shareholders' equity 160,199 145,649
--------- ---------
Total liabilities and
shareholders' equity $ 381,505 $ 322,087
========= =========
See accompanying notes to condensed consolidated financial statements.
<PAGE>5
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
(Unaudited-Thousands of dollars)
Six Months Ended
June 30,
---------------------
1996 1995
-------- --------
Net cash provided by (used in) operating
activities $ 14,017 $ 1,894
-------- --------
Cash flows provided by (used in) investing
activities
Additions to property, plant and equipment (9,421) (8,808)
Proceeds from sale of property, plant
and equipment 371 344
Acquisitions of businesses, net of cash
acquired (18,800) (3,980)
-------- --------
Net cash used in investing activities (27,850) (12,444)
-------- --------
Cash flows provided by (used in) financing
activities
Proceeds from borrowings 122,681 18,200
Reduction of borrowings (94,744) (9,565)
Proceeds from exercise of stock options 1,808 800
-------- --------
Net cash provided by financing activities 29,745 9,435
-------- --------
Effect of exchange rate changes on cash 50 43
-------- --------
Net increase (decrease) in cash and cash
equivalents 15,962 (1,072)
Cash and cash equivalents at
beginning of period 8,093 9,472
-------- --------
Cash and cash equivalents at
end of period $ 24,055 $ 8,400
======== ========
Significant noncash financing activity:
Purchase of treasury shares in connection
with the exercise of stock options $ 3,133
See accompanying notes to condensed consolidated financial statements.
<PAGE>6
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited-Thousands of dollars except share data)
1. Financial Statements
In the opinion of the Company's management, the
accompanying unaudited, condensed consolidated financial
statements contain all adjustments necessary to present
fairly the financial position as of June 30, 1996, the
results of operations for the three and six-month periods
ended June 30, 1996 and 1995, and cash flows for the six-
month periods ended June 30, 1996 and 1995. The December
31, 1995 condensed balance sheet data was derived from
audited financial statements, but does not include all
disclosures required by generally accepted accounting
principles. The accompanying financial statements contain
only normal recurring adjustments. All financial
information has been prepared in conformity with the
accounting principles reflected in the financial statements
included in the 1995 Annual Report filed on Form 10-K
applied on a consistent basis.
2. Business Acquisitions
All acquisitions have been accounted for under the
purchase method. The results of operations of the acquired
businesses are included in the consolidated financial
statements from the dates of acquisition.
On June 14, 1996, the Company acquired all of the
outstanding shares of Flexmag Industries, Inc. (Flexmag), a
manufacturer of flexible bonded magnets, located in
Marietta, Ohio, and the assets and business of a related
injection molded magnets business located in Seneca, South
Carolina, for $21,000. The excess of the purchase price
over the fair values of the net assets acquired was
approximately $12,400 and has been recorded as goodwill,
which is being amortized on a straight-line basis over 30
years.
In the first quarter of 1996, the Company formed a
joint venture in China by acquiring a 55 percent interest in
Shanghai SPS Biao Wu Fasteners Co. Ltd. (SSBW). The Company
contributed cash of $1,800 and manufacturing technology with
an assigned value of $600 during the first six months of
1996 for SSBW. The Company will additionally contribute
approximately $3,100 in cash, equipment and certain
manufacturing technology.
<PAGE>7
On August 16, 1995, the Company acquired approximately
48 percent of the outstanding stock of Metalac S.A.Industria
e Comercio (Metalac) located in Sao Paulo, Brazil. With
this acquisition, the Company increased its ownership to
approximately 95 percent. Metalac is a leading manufacturer
and distributor of industrial and automotive fasteners in
Brazil. The Company paid $4,000 in cash and issued 141,666
shares of the Company's common stock (approximate market
value on August 16, 1995 of $5,667). The Stock Purchase
Agreement also provides for additional payments contingent
on the future earnings performance of Metalac. Any
additional payments made, when the contingency is resolved,
will be accounted for as additional costs of the acquired
assets and amortized over the remaining life of the assets.
Prior to this acquisition, the Company accounted for its
investment in Metalac using the equity method.
On June 30, 1995, the Company paid approximately
$1,000 to increase its ownership in Unbrako K.K. from 50
percent to 100 percent. Unbrako K.K., located in Tokyo,
Japan, is a distributor of the Company's Unbrako and
aerospace products in the Japanese market. On March 3,
1995, the Company also acquired certain assets of Harvard
Industries, Inc.'s Elastic Stop Nut Division (ESNA). The
Company paid $6,200 in 1995 (of which, $2,900 was paid as
of June 30, 1995) to acquire, relocate and prepare these
assets for their intended use. The ESNA assets were used by
Harvard Industries, Inc. to manufacture aerospace locknuts
in Union, New Jersey.
The following unaudited pro forma consolidated results
of operations are presented as if the Flexmag and Metalac
acquisitions had been made at the beginning of the periods
presented. The effects of the other acquisitions (SSBW,
ESNA and Unbrako K.K.) are not material and, accordingly,
have been excluded from the pro forma presentation.
Six Months Ended
June 30,
--------------------
1996 1995
-------- --------
Net sales $245,156 $230,505
Net earnings 11,294 8,088
Earnings per common share
and common share equivalent 1.80 1.36
The pro forma consolidated results of operations
include adjustments to give effect to amortization of
goodwill, interest expense on acquisition debt and certain
other adjustments, together with related income tax effects.
<PAGE>8
The unaudited pro forma information is not necessarily
indicative of the results of operations that would have
occurred had the purchase been made at the beginning of this
period or the future results of the combined operations.
3. Inventories
June 30, December 31,
1996 1995
------------ ------------
Finished goods $48,971 $45,933
Work-in-process 23,588 20,095
Raw materials
and supplies 18,060 14,330
Tools 7,007 7,732
------- -------
$97,626 $88,090
======= =======
The June 30, 1996 inventory balances include $6,600 of
inventory from businesses acquired in 1996.
4. Long-Term Debt
On June 17, 1996, the Company completed a new long term
Note Purchase Agreement with three insurance companies.
Under this new agreement, the Company borrowed $85,000 at
fixed interest rates of 7.70 percent to 7.88 percent due in
annual installments from July 1, 2001 to July 1, 2011 (the
average fixed interest rate is 7.83 percent and the average
maturity is 11 years). The Notes Payable to Insurance
Companies, which provided for a fixed interest rate of 9.45
percent, described in the Annual Report on Form 10-K for
year ended December 31, 1995 were paid and canceled with
proceeds from the new Note Purchase Agreement. The proceeds
from the new agreement were also used to reduce debt
borrowed under the current Bank Credit Agreement and to fund
recent acquisitions.
The Company is subject to a number of restrictive
covenants under its various debt agreements. These
covenants, among other things, set forth limitations on
indebtedness, restrict the payment of cash dividends and
require the Company to maintain a minimum consolidated
tangible net worth, a minimum consolidated fixed charge
coverage ratio and a minimum consolidated current ratio.
Certain of the Company's debt agreements contain cross
default and cross acceleration provisions. Under these
covenants, the Company is permitted to declare dividends not
exceeding $7,500 plus 50 percent of consolidated net income
(or minus 100 percent of any consolidated net loss).
<PAGE>9
5. Environmental Contingency
The Company has been identified as a potentially
responsible party by various federal and state authorities
for clean up or removal of waste from various disposal
sites. At June 30, 1996, the accrued liability for
environmental remediation represents management's best
estimate of the costs related to environmental remediation
which are considered probable and can be reasonably
estimated. The Company has not included any insurance
recovery in the accrued environmental liability. The
measurement of the liability is evaluated quarterly based on
currently available information. As the scope of the
Company's environmental liability becomes more clearly
defined, it is possible that additional reserves may be
necessary. Accordingly, it is possible that the Company's
results of operations in future quarterly or annual periods
could be materially affected. However, management believes
that the overall costs of environmental remediation will be
incurred over an extended period of time and, as a result,
are not expected to have a material impact on the
consolidated financial position of the Company.
6. Earnings Per Share
Earnings per share is computed by dividing net earnings
by the weighted average number of common shares outstanding.
When dilutive, stock options are included as common share
equivalents using the treasury stock method.
7. Subsequent Event
On July 3, 1996 the Company acquired all of the
outstanding shares of Swift Levick Magnets Ltd., a
manufacturer of permanent magnets, located in Derbyshire,
England for approximately $19,000. This acquisition will be
accounted for under the purchase method. The results of
operations of the acquired business will be included in the
consolidated financial statements from the date of
acquisition.
<PAGE>10
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
---------------------------------------------------------
Condition and Results of Operations
-----------------------------------
Introduction
------------
The Company's operating results are a major improvement over
the corresponding periods in the prior year. The improvement in
operating results was due primarily to significant increases in
the operating performance of the Aerospace Products Division,
Industrial Products Division and Cannon-Muskegon, which
manufactures and sells superalloys. The Company's sales, orders
and backlog were higher in 1996 due to the continued growth of
its businesses and acquisitions.
Sales and Operating Earnings by Segment
---------------------------------------
(Unaudited-Thousands of dollars)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
1996 1995 1996 1995
-------- -------- --------- --------
Net sales:
Fasteners $ 85,400 $ 66,567 $ 164,155 $134,175
Materials 35,902 34,014 71,122 68,838
-------- -------- --------- --------
$121,302 $100,581 $ 235,277 $203,013
======== ======== ========= ========
Operating earnings:
Fasteners $ 7,520 $ 4,217 $ 13,536 $ 7,371
Materials 5,052 4,198 9,666 8,614
Unallocated corporate
costs (2,112) (1,855) (3,982) (3,780)
-------- -------- --------- --------
$ 10,460 $ 6,560 $ 19,220 $ 12,205
======== ======== ========= ========
Net Sales
---------
Net sales increased $20.7 million, or 20.6 percent, in the
second quarter of 1996 and $32.3 million, or 15.9 percent, for
the six month period ended June 30, 1996 compared to the same
periods in 1995.
Fastener segment sales increased $18.8 million, or 28.3
percent, in the second quarter of 1996 and $30.0 million, or 22.3
percent, for the six month period. The Company's aerospace
fastener sales were up 24.5 percent to $39.1 million in the
second quarter and 21.5 percent to $76.1 million for the six
month period. These increases are the result of improving demand
<PAGE>11
in the aerospace market. Due to the increase in new commercial
aircraft orders and the improved profit performance of the
airlines, the Company expects this trend of increasing aerospace
fastener sales to continue throughout 1996.
Sales by Metalac S.A. Industria e Comercio (Metalac) in
Brazil, Unbrako K.K. in Japan and Shanghai SPS Biao Wu Fasteners
Co. Ltd. (SSBW) in China were $10.8 million in the second quarter
of 1996 and $17.9 million for the six months ended June 30, 1996.
Excluding the sales of these businesses acquired by the Company
after June 30, 1995, the Company's industrial fastener sales
increased $1.0 million, or 6.2 percent, in the second quarter and
$1.3 million, or 4.0 percent, for the six month period; while the
Unbrako fastener sales decreased $600 thousand, or 3.6 percent,
in the second quarter and $3.0 million, or 8.4 percent, for the
six month period. The decline in Unbrako sales is attributed to
inventory reduction programs by distributors and competitive
pricing conditions and weak demand in European markets.
Materials segment sales increased by $1.9 million, or 5.5
percent, in the second quarter and $2.3 million, or 3.3 percent,
for the six month period. Increased sales of superalloys is due
primarily to higher sales of vacuum melt alloy products
manufactured for aerospace applications. Sales of stainless
steel and cobalt-based alloys also increased from prior year
levels. Sales of magnetic materials to the automotive,
telecommunications and personal computer markets were strong but
slightly below prior year levels. If demand from these markets
continues to soften, sales of magnetic materials will continue to
fall below 1995 levels.
Operating Earnings
------------------
Operating earnings of the fastener segment improved by $3.3
million in the second quarter and $6.2 million for the six month
period. The improvement in earnings is attributed to increased
sales of aerospace fasteners and cost reductions attributed to
the Company's investment in new state-of-the-art computer
controlled machine tools. The operating earnings from Unbrako
K.K. and SSBW, two companies acquired after the second quarter of
1995, also contributed to this increase.
In the materials segment, operating earnings increased by
$854 thousand in the second quarter and $1.1 million for the six
month period. The improvement in operating earnings is
attributed to a higher volume of superalloy sales, a decrease in
the cost of certain raw materials and a better product mix of
magnetic materials sales.
<PAGE>12
Other Expense
-------------
Income from the equity in earnings of affiliates decreased
from $1.0 million in the six months ended June 30, 1995 to $354
thousand in the six months ended June 30, 1996. As discussed in
Note 2 to the financial statements, the Company increased its
ownership interest in Metalac and Unbrako K.K. in August and June
of 1995, respectively. Prior to these acquisition dates, the
Company accounted for its investment in these companies using the
equity method. The change in "other, net" expense is attributed
to the write off of debt fees related to the early retirement of
certain debt (see Note 4 to the financial statements) and to the
disposal of certain machinery and equipment that was replaced
with more modern equipment.
Net Earnings
------------
The Company recorded second quarter 1996 net earnings of
$6.0 million or $.95 per share, compared to net earnings of $3.9
million or $.67 per share for the second quarter of 1995. Net
earnings were $11.1 million or $1.76 per share for the six months
ended June 30, 1996 compared to $7.0 million or $1.20 per share
in 1995.
Orders and Backlog
------------------
Incoming orders for the second quarter of 1996 were $126.1
million compared to $113.8 million in 1995, an 11 percent
increase. Incoming orders for the six months ended June 30, 1996
were $254.0 million compared to $235.9 million for the same
period in 1995, a 7.7 percent increase. The increase in orders
is attributed to an increase in orders received by the Aerospace
Products Division ($6.1 million for the quarter and $14.0 million
for the six month period) and orders received by Metalac, Unbrako
K.K. and SSBW ($8.4 million for the quarter and $16.0 million for
the six month period). Partially offsetting these increases were
a decrease in orders received for Unbrako Products sold in North
America and Europe ($2.3 million for the quarter and $10.0
million for the six month period) and the decrease in orders
received for magnetic materials ($5.5 million for the quarter and
$11.0 million for the six month period). Backlog at June 30,
1996 was $154.5 million, compared to $127.6 million on the same
date a year ago and $136.5 million at December 31, 1995.
Acquisitions
------------
In 1996, the Company increased its investment in the
magnetic materials business of its materials segment by acquiring
certain businesses to be combined with the Company's subsidiary,
<PAGE>13
The Arnold Engineering Co. (Arnold), a leading manufacturer of
magnetic materials and components. As discussed in Note 2 to the
financial statements, the Company acquired all of the outstanding
shares of Flexmag Industries, Inc. (Flexmag), a manufacturer of
flexible bonded magnets, located in Marietta, Ohio and the assets
and business of a related injection molded magnetics business
located in Seneca, South Carolina, for $21 million on June 14,
1996. In 1995, these businesses had sales of approximately $18.8
million. This acquisition will further expand Arnold's product
lines into markets that the Company believes have attractive
growth potential. As discussed in Note 7 to the financial
statements, the Company acquired all of the outstanding shares of
Swift Levick Magnets Ltd.(Swift Levick), a manufacturer of
permanent magnets, located in Derbyshire, England for
approximately $19 million on July 3, 1996. Swift Levick is a
European manufacturer of permanent magnets with 1995 sales of
approximately $20 million. The acquisition of Swift Levick
represents a significant opportunity for Arnold to expand sales
into European markets.
Liquidity and Capital Resources
-------------------------------
Management considers liquidity to be the ability to generate
adequate amounts of cash to meet its needs and capital resources
to be the resources from which such cash can be obtained,
principally from operating and external sources. The Company
believes that capital resources available to it will be
sufficient to meet the needs of its business, both on a short-
term and long-term basis.
Cash flow provided or used by operating activities,
investing activities and financing activities is summarized in
the condensed statements of consolidated cash flows. Net cash
provided by operating activities increased by $12.1 million
compared to the first six months of 1995 primarily due to the
$4.1 million improvement in net earnings and the $2.9 million
decrease in the use of cash to increase working capital.
Consistent with the increase in sales and orders received in the
first six months of 1996, the Company reported higher levels of
accounts receivable and inventory compared to the December 31,
1995 condensed consolidated balance sheet. The 1996 acquisitions
of Flexmag and SSBW also contributed to higher levels of working
capital on the June 30, 1996 condensed consolidated balance
sheet.
The increase in cash used in investing activities is
attributed to the 1996 payment for Flexmag ($20 million) compared
to the 1995 payments for the Elastic Stop Nut Division of Harvard
Industries, Inc. ($2.9 million) and the Company's increase in
ownership interest in Unbrako K.K. ($1 million). Additionally,
the Company spent $9.4 million for capital expenditures in the
<PAGE>14
first six months of 1996 and has budgeted $26 million for the
full year of 1996, as reported on Form 10-K for the year ended
December 31, 1995.
The Company's total debt to equity ratio was 60 percent at
June 30, 1996, compared to 44 percent at December 31, 1995.
Total debt was $95.8 million at June 30, 1996 and $64.7 million
at December 31, 1995. As of June 30, 1996, under the terms of
the existing credit agreements, the Company is permitted to incur
an additional $48 million in debt. As discussed in Note 4 to the
financial statements, the Company completed a new long term Note
Purchase Agreement in the amount of $85 million at an average
fixed rate of 7.83 percent and an average maturity of 11 years.
Proceeds were used to reduce certain bank borrowings and existing
long term debt and to fund recent acquisitions.
<PAGE>15
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
PART II
OTHER INFORMATION
Item 4. Submission of Matters to Vote of Security Holders
---------------------------------------------------------
(a) The Annual Meeting of Shareholders was held on April 30,
1996.
(b) The name of each director elected at the Annual Meeting as
the Company's two Class I directors, each to hold office
until the 1999 Annual Meeting of Shareholders, is as
follows:
Harry J. Wilkinson
Eric M. Ruttenberg
The name of each other director whose term of office
continued after the meeting is as follows:
Dr. John F. Lubin
Raymond P. Sharpe
Richard W. Kelso
Howard T. Hallowell III
Charles W. Grigg
(c) 1. The results of the election of directors with respect
to each nominee for office was as follows:
For Withheld
--------- ---------
Harry J. Wilkinson 4,658,567 4,879
Eric M. Ruttenberg 4,659,667 3,779
Item 6. Exhibits and Reports on Form 8-K
----------------------------------------
(a) Exhibits
11 Computation of Earnings Per Share Statement.
(b) No reports on Form 8-K were filed during the quarter ended
June 30, 1996.
<PAGE>16
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SPS TECHNOLOGIES, INC.
----------------------
(Registrant)
Date: August 12, 1996 /s/William M. Shockley
----------------------
William M. Shockley
Vice President, Chief
Financial Officer and
Controller
Mr. Shockley is signing on behalf of the registrant and as the
Chief Financial Officer of the registrant.
<PAGE>17
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit 11 - Computation of Earnings Per Share
Statement
<PAGE>18
Exhibit 11
SPS TECHNOLOGIES, INC. AND SUBSIDIARIES
Computation of Earnings Per Share Statement
(Thousands of dollars, except share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ----------------------
1996 1995 1996 1995
--------- --------- --------- ---------
Net earnings $ 6,020 $ 3,925 $ 11,060 $ 6,975
========= ========= ========= =========
Weighted average
number of common
shares outstanding
during the period 5,953,673 5,658,707 5,932,744 5,651,840
Weighted average
number of maximum
shares subject to
exercise under
outstanding stock
options at end of
period 662,262 647,985 667,511 658,980
--------- --------- --------- ---------
6,615,935 6,306,692 6,600,255 6,310,820
Less treasury shares
assumed purchased
with proceeds from
assumed exercise of
outstanding options (a) 286,569 474,380 326,399 516,083
--------- --------- --------- ---------
Weighted average
number of common and
common equivalent
shares outstanding
after assumed
exercise of options 6,329,366 5,832,312 6,273,856 5,794,737
========= ========= ========= =========
Earnings per share
based on above
assumptions (b) $ .95 $ .67 $ 1.76 $ 1.20
========= ========= ========= =========
Earnings per share
as reported $ .95 $ .67 $ 1.76 $ 1.20
========= ========= ========= =========
<PAGE>20
(a) All options are exercisable under a nonqualified plan. The
proceeds from assumed exercise of options aggregated
$20,203,111 and $20,288,214 in the three and six-month
periods ended June 30, 1996 respectively; the proceeds from
assumed exercises aggregated $15,971,902 and $16,121,252 in
the three and six-month periods ended June 30, 1995,
respectively. The proceeds and number of treasury shares
assumed purchased were determined on the most likely
exercise assumption.
(b) Primary and fully diluted earnings per share are the same
for each period presented.
<PAGE>21
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 24,055
<SECURITIES> 0
<RECEIVABLES> 80,241
<ALLOWANCES> 1,545
<INVENTORY> 97,626
<CURRENT-ASSETS> 221,014
<PP&E> 243,224
<DEPRECIATION> 122,649
<TOTAL-ASSETS> 381,505
<CURRENT-LIABILITIES> 84,159
<BONDS> 91,134
0
0
<COMMON> 6,621
<OTHER-SE> 153,578
<TOTAL-LIABILITY-AND-EQUITY> 381,505
<SALES> 235,277
<TOTAL-REVENUES> 235,277
<CGS> 187,502
<TOTAL-COSTS> 187,502
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,240
<INCOME-PRETAX> 15,810
<INCOME-TAX> 4,750
<INCOME-CONTINUING> 11,060
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,060
<EPS-PRIMARY> 1.76
<EPS-DILUTED> 1.76
</TABLE>
